China-US spat at G-20 largely came down to dispute over one phrase

WASHINGTON – A disagreement between Chinese and US officials at a Group of 20 (G-20) finance chiefs meeting this week mostly revolved around a dispute over one phrase, according to people familiar with the talks.

Treasury Secretary Scott Bessent on Sept 1 publicly accused Chinese officials of preventing the group from issuing a joint communique after the two-day gathering in Asheville, North Carolina.

The US side attributed that impasse to disagreements on language spanning issues from critical minerals to debt restructuring. 

But the most crucial sticking point was the inclusion of the phrase “non-market” in a sentence addressing trade imbalances, according to the people familiar with the situation, who asked not to be identified discussing private matters.

That term was seen by Chinese officials as a veiled attack on state-owned enterprises (SOEs) that are a foundational pillar of the nation’s economy, the people said.

During talks over the wording, China proposed a tweaked phrase that would have addressed trade imbalances without putting a spotlight on the nation’s SOEs, according to the people.

Chinese negotiators privately received support from some countries for its suggestion, though they failed to reach consensus with the US, the people said.

The final chair statement from the US included a line saying countries should agree to “eliminate non-market policies and practices that exacerbate imbalances”.

The dispute highlights simmering tensions between the world’s biggest economies weeks before Chinese President Xi Jinping heads to Washington for a high-profile summit with his US counterpart Donald Trump.

Bessent is a key figure in steering Washington’s relationship with Beijing, leading trade negotiations, and is poised to helm bilateral talks in the coming weeks on artificial intelligence.

China’s Ministry of Finance and the US Treasury did not reply to a request for comment made outside normal business hours.

“It’s unfortunate the Chinese didn’t want to come along,” Bessent told Fox News in an interview on Sept 2, referring to Beijing’s objections to the G-20 communique.

The Chinese delegation in Asheville was led by Pan Gongsheng, governor of the People’s Bank of China (PBOC), and Vice-Finance Minister Liao Min, who was also part of Beijing’s negotiation team during Trump’s tariff war in 2025. 

The US government officially defines “non-market” policies and practices as government interventions that distort global trade in favour of domestic industries, including conduct by state-owned or controlled enterprises. 

The word has also long featured in US criticism of China’s trade practices, with the US Trade Representative describing a 2017 probe as a response to the Asian country’s “non-market economic system”.

Including the phrase in a G-20 communique could be read as a coded reference to China without naming the nation explicitly, the people familiar with the matter said. 

References to “non-market” policies and practices appeared in two of the four paragraphs in the US chair statement that the Treasury said were problematic for China.

The other sections threw a spotlight on the functioning of key value chains such as critical minerals and provisions tied to debt restructuring, according to the US statement.

China’s Finance Ministry did not directly address Bessent’s comments in a statement released on Sept 2, but said “all parties should take a comprehensive, objective and balanced view of the issue of global imbalances, and should fundamentally resolve the debt problems of developing countries by promoting development”.

Pan, the PBOC governor, said in a Sept 2 statement that rising protectionism, overstretched national security framing and policy unpredictability have been key drivers of worsening global imbalances.

He urged deficit nations to narrow fiscal shortfalls and lift savings rates while surplus countries appropriately boost consumption and investment.

“All countries should formulate medium- and long-term policy plans, make clear commitments and implement them resolutely,” he said.

Subsidy fight

China’s formidable export engine remains a flashpoint in ties with the US. The Asian country clocked a record trade surplus of US$1.2 trillion (S$1.5 trillion) in 2025 – a 20 per cent increase from the previous year – and Bessent made it a key issue throughout the meeting of G-20 finance chiefs.

The US had a trade deficit of roughly US$200 billion with China in 2025, Bureau of Economic Analysis data showed.

Bessent on Sept 2 reiterated criticism of China, saying its policies suppress domestic demand and rely on exports for growth.

Claiming that about 4 per cent of the nation’s gross domestic product goes into “industrial subsidies”, Bessent called out carmaker BYD as a beneficiary.

“Anyone here ever seen a BYD car?" Bessent said at a Charlotte Economics Club event in North Carolina. “It is the best US$70,000 car that US$35,000 can buy – it is heavily subsidised.”

A Rhodium Group report earlier in 2026 found that direct grants to BYD translated into roughly US$292 per vehicle, accounting for roughly 5 per cent of the US$4,700 cost gap relative to Tesla in China.

Most of BYD’s cost savings came from the company making many of its own components, and because of the scale of its production, the report said.

China has rejected accusations from the US and others that it achieved its record surplus through unfair state support for domestic companies, with the Commerce Ministry releasing a white paper in July, titled China’s Position On The So-called Excess Capacity Issue.

The paper pointed out that the US and European Union provided subsidies for industries such as electric vehicles and AI.

“Accusing China of ‘unfair competition’ and ‘non-market policies and practices’ is a typical case of ‘double standards’ and genuine unfairness,” the paper said. 

BLOOMBERG